Ivanhoe eyes Phase 3 expansion at Kamoa-Kakula in DRC

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Phase 3 of Kamoa-Kakula will include two new underground mines known as Kamoa 1 and Kamoa 2 and initial ramp development at Kakula West, the company said. A new mill of 5 million tons per year will be established next to the two new mines.

“We are at an inflection point for the copper industry…a point where we must determine how to meet growing demand, even as the discovery and construction of new mines becomes increasingly difficult,” company co-chairman Robert Friedland said in a statement.

“Humankind will likely need as much copper over the next 22 years as it has at this point in its history – around 700 million metric tons – just to sustain 3% GDP growth. That doesn’t even add up. account of the growing demand linked to global investments to combat climate change through aggressive electrification,” he added.

Located approximately 25 km west of the city of Kolwezi and approximately 270 km from the provincial capital of Lubumbashi, the Kamoa-Kakula copper project is a joint venture between Ivanhoe Mines (39.6%), Zijin Mining Group ( 39.6%), Crystal River Global (0.8%) and the DRC government (20%).

The company expects copper production from the first two phases of Kamoa-Kakula to exceed 450,000 tonnes per year by the second quarter of 2023 and gradually reach peak annual production of more than 800,000 tonnes.

Phase 3 also includes a direct to blister flash smelter with a design capacity of 500,000 tonnes per year of approximately 99% pure blister copper. The company expects it to be one of the largest single-line copper flash smelters in the world and the largest in Africa.

Once in operation, the smelter should allow the project to recover and sell sulfuric acid as a by-product. There is a strong demand in Congo for sulfuric acid to recover copper from oxide ores, the company said. Currently, copper mines in the region import “significant volumes of sulphur”.

The project’s partnership with Inga II, a hydropower plant located in southwestern DRC, is expected to provide the Kamoa-Kakula complex with sustainable power for Phase 3 and future expansions, Ivanhoe said.

Scotiabank analyst Orest Wowkodaw called the update modestly positive in a research note to clients.

“The company is now considering a significantly larger Phase 3 expansion (additional throughput of 5.0 million tonnes per annum from 3.8 mtpa previously), increasing the total throughput level of the operation to 14.2 Mtpa from by the end of 2024,” Wowkodaw wrote.

“Overall, while we await further details, we view the update as a modest positive for IVN shares given the larger planned Phase 3 expansion.”

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